Universal or voluntary membership? That was the question put to tertiary students in 1999 after the National Government passed a law insisting they choose how they should belong to their student association.

Auckland took the voluntary path. It didn't go well. In 2000 numbers plummeted - just 3000 out of 28,092 students agreed to pay the $30 joining fee. By 2002 the numbers were still dismal - just 2700 out of 31,502 had joined.

Its mandate slashed, the Auckland University Students' Association (AUSA), with a proud legacy of serving students since 1891, was down, but not out.

In 2003 it staged a miraculous comeback, getting 20,000 students to sign up. Membership has stayed around that level ever since. The reason: joining is free.

Except the services AUSA provides aren't free at all.

In the first year of voluntary membership there was a $92 rise in the University of Auckland's "student service levy" from $75 to $167 and it's been increasing ever since.

Today, a full-time undergraduate student can expect to pay $542 in compulsory levies, which are used in part to contract AUSA to provide services such as catering, advocacy, representation, support for sports, cultural clubs and societies, plus events and entertainment.

What's wrong with this picture?

Nothing as far as Act, National and the Business Roundtable are concerned.

This is how they want the tertiary student world to be - free to associate or not. Which is why the Government is soon to pass the Education (Freedom of Association) Amendment Bill, outlawing universal membership and forcing all tertiary institutions to follow Auckland's lead.

Never mind that all other tertiary institutions have voted under the 1998 law for universal membership and want to keep it that way because of the detrimental effect on student services.

Never mind too that, as happened in Auckland, somebody - most likely the institution - has to pick up the tab. And that students, while they may be guaranteed the freedom not to associate, will still have pay - whether by membership fee or levy.

"AUSA objects to the notion that we are in some way an example of how students' associations can survive, even thrive, under a model of voluntary student membership," the association said in its submission to the select committee overseeing the bill.

AUSA's survival is thanks to its contract with the university and largely because it had built up and owns a number of profitable business assets - including cafeteria services, a bar, radio station, and bookshop. Unable to collect mandatory membership fees to fund its services, AUSA sold some assets, placed others in trust, and restructured some into commercial entities with the purpose of providing a dividend to the association.

"The University of Auckland believes active and viable student associations are a vital and integral part of a successful university," the university said in its submission to the select committee. It was worried the bill would have the "unintended consequence of 'sidelining' such associations" and wanted to ensure it would still be free to legally contract with AUSA as it has in the past.

Bizarre as it sounds, the university felt the bill would curtail its freedom to associate with the association.

AUSA points out the bill also creates unnecessary costs.

In the past unless students opted out, membership was a given. Under free voluntary membership AUSA has to spend thousands of dollars to get students to join. The 2010 bill was $60,000.

But while AUSA has managed to carry on, what happened at the University of Waikato shows how things can go terribly wrong.

The Waikato Students' Union (WSU), representing 10,000 students, was the first to opt for voluntary membership, beginning in 1998. That year, membership revenue fell dramatically from $593,827 to just $23,253. In 1997, in preparation for the changeover, the Union's Campus Movies service was halted and its assets sold.

In 1998, more assets were sold off, including Campus Travel and the student radio station, Contact FM. In the second year, membership revenue fell to $3,442 and the WSU had a trading loss of $130,934.

Losses continued in 2000 when another referendum was held which voted to return to universal membership. In 2001 with $539,901 in membership revenue, WSU started to rebuild services.

"Voluntary membership completely devastated our services, student culture, and ability to support students," the WSU said in its submission.

"It has taken a decade for the WSU to rectify the effects of an ideological policy."

Ideology is the key driver of the private members' bill sponsored by Act.

"Only full voluntary membership of students' associations will solve the principled human rights issues and practical accountability and responsibility issues that compulsory membership violates," Act MP Heather Roy told Parliament during the bill's second reading. She cited the Bill of Rights Act 1990 which "protects the rights of individuals to determine whom they associate with, and which political ideas they associate with, and to do so without compulsion or undue influence".

What she didn't say was that the select committee received legal opinions - including one from Sir Geoffrey Palmer - indicating that universal membership, because of its opt-out provisions, does not breach the right to freedom of association.

Membership isn't compulsory because students have the option to conscientiously object. The Human Rights Commission also told the select committee "that students' freedom to not associate is protected sufficiently under the current Act".

Select committee chairperson Allan Peachey said National supported the Act bill was because "this side of the House believes very, very strongly in freedom of association and individual responsibility".

Peachy said he was confident "the good students associations will not only survive but thrive".

Further evidence of the ideology driving the bill is found in Sir Roger Douglas' submission: "Freedom of association is a right that individuals - not collectives - have, and they are currently being denied the right to choose for themselves."

The Business Roundtable goes a step further in its submission, arguing that voluntary membership "would be likely to foster a more open and tolerant culture on campuses, and one less prone to excesses of 'political correctness' which are inimical to free thinking and expression".

But for groups like the Otago University Students' Association (OUSA) the bill presents nothing but problems - for the students, the Dunedin community and the taxpayer - due to the infrastructure costs and having to replace essential services OUSA would no longer be able to provide.

"The bill claims to be solving a problem that does not exist," OUSA said, pointing out the association was not designed to service the best interests of only a proportion of students, rather than the whole. It said it did not have the infrastructure to exclude some but not others from its services. As well as creating inefficiencies OUSA said the bill would create the problem of some "freeloading" on the system and "an irresponsible attitude" discriminating against students "based on their choice of association".

The University of Canterbury Students' Association (UCSA) is concerned that should the Bill become law and its mandate to represent the student body is lost, "the quality of university life and involvement within the immediate and greater community will suffer significantly." Established in 1894, UCSA has commercial services on campus, plus off site assets and investments which means no membership fee is required of its members.

University Sport New Zealand (USNZ) said the bill "will have a catastrophic effect on tertiary sport" and a significant destabilising effect on the funding and future ofthe organisation.

Further evidence of the detrimental effect of the bill is found in a PricewaterhouseCoopers report on the economic impact of the voluntary membership commissioned New Zealand Union of Students Associations.

It calculated student association services and income were likely to decrease by between 48 per cent and 73 per cent.

"If the tertiary sector wishes to see current service levels maintained on campus, the minimum cost of this is likely to be the amount of the associations' reduced membership fee revenue - $10.2 million," says the report. Even if tertiary institutions pick up some services and activities previously carried out by associations, the report's "best case scenario" still shows an overall service reduction of 48 per cent.

But though the majority of submissions and evidence presented is against the bill, the pleas are falling on deaf ears.

Act, National and United Future have the numbers to pass the legislation. The law won't, however, come into effect until the beginning of 2012 and Labour says if it's returned to Government in the next elections it will repeal the legislation.

At the University of Auckland, there remain some perplexing questions. Why is it the only university to have voted by referendum for voluntary membership? Why, despite substantial membership drives each year do some 10,000 students not join the association? Odd, because those 10,000 are still paying for the association services - through the compulsory student levy.

The university says in 2010, 36 per cent of the levy went towards "student union costs" - comprising the Student Union and Student Commons facility operating costs and utilities, funding to support AUSA - including clubs, cultural activities, student representation and advocacy, the Postgraduate Students' Association, Nga Tauira Maori and the Auckland University Pacific Island Students' Association, Orientation, Student Financial Support and Student Emergency Support.

The remainder is used to cover the costs of Student Health services, counselling, the Recreation Centre, careers and accommodation services, the chapel, the international student advisory and disabilities support.

AUSA says the reason students don't join is largely because many don't know what the association does and that it's difficult to get that information across without spending up large on marketing - something it has resisted because it seems wasteful of its precious resources. While most will be aware, for example, that AUSA runs Orientation Week and Shadows (the student bar), many would be unaware of AUSA's welfare and advocacy services - such as its Welfare Assistance Grants for students in need.

Most would be unaware, too, that AUSA provides student representation on many university policy committees to ensure student voice in university decisions. The association points out also that, as there has never been a time in the University's recent history when services have not been provided, students expect that AUSA services will always be there. "Students do not automatically draw a conclusion between the continued existence of services and their reliance on the continued existence of students' associations." AUSA points out that most students don't realise that it uses the profit from its commercial operations to finance its core services. "If our businesses fail to provide a dividend or collapse, AUSA is placed in jeopardy."

AUSA is also concerned that its existence is reliant on the continued benevolence of the university - an arrangement that it feels compromises its independence and its core role to act on behalf of students.

"The university could pull our funding at any time if we were to act in a way that [it] disagreed with."

All of which makes it difficult not see the bill, as Green MP Gareth Hughes told Parliament, as "an ideological problem in search of a solution", designed to reduce students' ability to organise and stifle critique of Government policy.

But student apathy must also take some responsibility. While there have been protests against the bill, they haven't been particularly effective.

Yet the detailed submissions to the select committee show that some do care very much about what it means to belong to a university and how active student groups are vital to a vibrant university culture. They also show a proud history, spanning a century, of playing a significant role in building universities' reputations.

Whether such things still matter or will survive under this bill remains to be seen.